Governing AI: Why Responsible AI Adoption is a Leadership Imperative for SMEs

Artificial Intelligence is no longer a hypothetical future. It’s already shaping how we work, communicate, and make decisions. For small and medium-sized enterprises (SMEs), the opportunities are exciting: automation, better insight, and new capabilities. But as with any powerful technology, AI’s benefits come with risks. And without governance, those risks can easily outweigh the rewards.

At Dune Technology, we see this every day — businesses eager to harness AI, but unsure how to do so responsibly. As someone with a background in tech, compliance, and strategic leadership, I believe strongly that how you adopt AI is just as important as what you adopt.

The Consequences of Ungoverned AI Adoption

In many SMEs, AI adoption starts informally. A team begins using a third-party tool, someone experiments with a chatbot, or a manager automates a task with a public LLM. It’s well-intentioned, often useful. But without any oversight, these ad hoc efforts create real issues:

Disconnected use of tools across teams

When teams adopt different AI tools in isolation, it leads to fragmentation. This makes it hard to share learnings, align strategies, or build consistent workflows across the business.

Security and data protection vulnerabilities

Without governance, sensitive data can end up in unsecured systems. This increases the risk of leaks, breaches, or accidental exposure—especially when tools don’t meet your company’s security standards.

Difficulty measuring ROI or performance

If AI is being used in silos, there’s no clear way to track what’s working or why. That makes it nearly impossible to measure impact or justify further investment.

Risk of non-compliance with policies and regulation

Unapproved tools may not follow industry standards or legal requirements, exposing the business to compliance issues, penalties, or reputational damage.

Shadow IT that leadership isn’t even aware of

When AI is deployed informally, it often flies under the radar. This lack of visibility means risks go unmitigated and opportunities for improvement are missed.In short, innovation without structure leads to inconsistency, and sometimes, to harm.This isn’t just theory. Shopify recently made headlines when CEO Tobi Lütke told staff they must justify why AI can’t be used before requesting new headcount. It was a clear signal that even fast-moving tech companies are formalising how AI is evaluated and deployed. As Lütke put it:"Before asking for more headcount and resources, teams must demonstrate why they cannot get what they want done using AI."

Governance Enables Progress

When we talk about AI governance, we’re not talking about red tape. We're talking about clarity. Good governance helps teams move faster and with more confidence, because they know what’s permitted, what’s protected, and what’s expected.At Dune, we help SMEs implement governance in a way that’s practical, proportionate, and aligned to their actual risks and objectives. That includes:

- Identifying where AI can deliver real value- Creating simple, effective frameworks for tool use- Vetting technologies with both performance and security in mind- Supporting teams with training and guidanceWe’ve found that once governance is in place, it doesn’t slow down adoption, it accelerates it.And it’s becoming more urgent. A recent Cisco study revealed that while 97% of CEOs plan to integrate AI into their operations, only 1.7% feel fully prepared. The gap between ambition and readiness is a governance challenge as much as a technical one.

This Is a Leadership Issue

AI shouldn’t be left purely to tech teams. It raises questions of ethics, compliance, accountability, and strategy—areas that fall squarely within leadership’s remit. Boards and executives have a role to play in setting expectations, asking the right questions, and ensuring that AI use aligns with company values.At Davos earlier this year, European Commission President Ursula von der Leyen made this point clearly:"Our future competitiveness depends on AI adoption in our daily businesses, and Europe must up its game and show the way to responsible use of AI."

This is a direct warning: embed AI into your day-to-day operations or risk falling behind your competition.

Final Thoughts

AI has the potential to transform how SMEs operate. But only if it’s adopted thoughtfully. Without governance, the risks multiply. With it, AI becomes a powerful, trusted part of your business toolkit.Responsible adoption isn’t a barrier—it’s a foundation. And now is the time to build it.